Increased corn prices: Good news for commodities, bad for restaurants
According to the US Department of Agriculture, the
price of corn is now at US$3.20 a bushel, versus an average price of US$2.00
last year. Prices for poultry on the commodities market, meanwhile, have
finally begun to recover in the past two months after the bird flu scare sent
prices lower in 2006.
According to the US Department of Agriculture
, prices for broilers averaged
US$0.73 per pound this week. In 2006, the average price was US$0.63 per pound.
That recovery, analysts and economists say, could be enough to bring producers
back to profitability much sooner than previously expected. Although the poultry
business lost money in January, profitability could return to the industry by as
early as February.
However, Richard Lobb, spokesman for the National Chicken
, which represents chicken producers, said since the higher costs are
here to stay, producers will be forced to pass the costs along to consumers.
Richard Bond, chief executive of world's largest chicken producer Tyson Foods Inc
"Neither the retailer or restaurant operator nor the protein producer can
absorb these higher grain costs," he told analysts in a late January conference
call. "They will be passed along to the consumer who will pay higher prices for
protein and other grain-dependent products."
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